Wednesday, March 14, 2007

The unseen dead hand of national Democratic meddling seems to have killed a promising example of grassroots democratic activism in New Mexico that could have been a model for reviving the Democratic Party nationwide and in that key swing state.

While no one has yet come forward and identified the culprits, it seems evident from the behavior and explanations of some key one-time backers of a proposed legislative joint resolution calling on the US House to impeach President Bush, who at first supported the measure but then joined 17 Republican members of the state senate in killing it, that pressure was brought to bear on them to trade sides.

Only last week, the resolution, submitted by State Senator Gerald Ortiz y Pino, looked like a sure thing. It had breezed through the relevant committees with solid Democratic support and only needed to be accepted for debate by a full vote of the senate, which has 20 Republicans and 23 Democrats.

But then something strange happened.

When accepting the resolution for debate was put to a vote, the Senate’s 17 Republicans were on hand but most Democrats were out of the room. The person chairing the session, Senator Ben Altamirano, a Democrat who had been a supporter of Ortiz’s resolution in committee, allowed the vote to go ahead despite the absence of many Democrats, and moreover, permitted a voice vote. The Republicans yelled their “nays” loudly, and Altamirano ruled that the measure had passed.

Democrats came back the next day and demanded for a voice vote on the measure. It went down to defeat, 26-17, with Altamirano and eight other Democrats voting against it.

Altamirano later insisted that he had not voted against Ortiz’s resolution, which he improbably claimed to still support, arguing that all he had done was vote that the prior day’s controversial ruling declaring the measure dead by voice vote had been proper. He failed to mention that he was referring on his own ruling as president pro-tempore and chair of the session the day before.

Meanwhile, another turncoat on the issue, State Senator Carlos Cizneros, a co-sponsor of Ortiz’s resolution who also surprised Ortiz and other resolution backers by voting to kill the bill, offered another explanation altogether. “I didn’t vote to kill the bill,” he said in an interview days later. “I voted to send it back to committee because the votes weren’t there to pass it. I didn’t want to see it die, so I voted against it.”

“That’s pretty weasily,” commended Desi Brown, an aide to Sen. Ortiz. “The bill was killed and it cannot be brought back to the Senate floor, unless Sen. Cizneros knows something about senate rules that we don’t know.”

A third Democratic turncoat, Sen. David Ulibarri, failed to return calls to explain his reason from voting against the resolution after earlier backing it in committee.

Ortiz aide Brown said only two of the nine Democrats voting against the resolution represent majority Republican districts, a situation which might explain their taking a negative position on the resolution. Others of the nine represent fairly conservative Democratic districts, but of course, the Bush presidency is unpopular among Democratic voters of all political stripes, and among independents too.

Brown says that prior to the vote killing the resolution, five of the nine Democratic senators who voted with Republicans had been seen conversing privately, suggesting a coordinated strategy to kill the measure.

Brown and impeachment movement activists in the state insist that days before the debacle in the Senate, they had clear support for passage among senate Democrats.

Brown says he does not have evidence of any pressure on senate Democrats, but speculation is focused on Gov. Bill Richardson, an announced candidate for the Democratic presidential nomination, and on Sen. Jeff Bingaman.

The Democratic National Committee has targeted New Mexico as a key battleground state for 2008, and given the national party leadership’s clear desire to avoid an impeachment battle in the House, it seems increasingly evident from the strange behavior of turncoat senate Democrats in the state, that pressure was brought to prevent the passage of a joint resolution that would have put the issue front and center in the US House of Representatives. This seems particularly likely given the overt pressure that has been brought to bear on state senators in the state of Washington by two members of that state’s congressional delegation. A similar joint resolution is facing a do-or-die vote in the Washington state senate today or tomorrow.

One curious aspect in this story is the behavior of senate Republicans in New Mexico. Last spring, when impeachment talk was first surfacing, national Republican leaders argued in the media that a Democratic-led impeachment campaign would be good for Republicans since it would “rally the base” of the Republican Party. Many Democratic Party leaders have bought into that theory, which is why they are afraid of the growing impeachment movement. But if impeachment is good for Republicans, why would they have acted in concert in New Mexico to kill Sen. Ortiz’s resolution? Democrats should think twice before joining Republicans in such efforts to kill off citizen impeachment campaigns at the state level. Clearly Republicans don’t really want to see an impeachment hearing in Washington, DC, which suggests that Democrats should be pushing ahead for those hearings, not helping Republicans to fend them off.

Democratic state Senator John Grubesic, a backer of the Ortiz resolution, said after the vote killing the measure, “The action taken by the Senate was not the action taken by a body that protects the freedoms of a sovereign people. The action was a carefully orchestrated option designed to protect the integrity of an institution and perpetuate the well-oiled workings of government.”

He added, “Our actions today showed where our priorities are, we forgot that the Constitution was not designed to serve government, but to protect the people. There should have been a debate, argument, uproar. Instead, we quietly gutted the sovereign power of the people with polite political procedure. When future generations look back on our time, the shock will not be because of the violent, impolite nature of the fight that preceded the destruction of Constitutional government, but by the meekness with which we watched it die.”

Erich Kuerschner, a local impeachment activist in the state, notes that at the state party convention held in 2006, 80 percent of the delegates endorsed a plank calling for impeachment of the president. “The party constituents made a pretty clear choice back then,” he says, “and it’s not being reflected by the actions of the party leadership.”8:28 am pst

Was I a good American? How good an American was I? Did I do what I could to resist the takeover of my country and the brutalisation of my fellow human beings? How much further could I have gone? Were the crimes of the Bush administration those that demand you give up your life and everyday commitments to throw yourself into maximum resistance? If not, then what were we waiting for? The questions have troubled me regularly these last five years, because I was one of the millions of American citizens who did not shut down Guantánamo Bay and stop the other atrocities of the administration.

I wrote. I gave money, sometimes in large chunks. I went to anti-war marches. I demonstrated. I also planted a garden, cooked dinners, played with children, wandered around aimlessly, and did lots of other things you do when the world is not crashing down around you. And maybe when it is. Was it? It was for the men in our gulag. And the boys there. And the rule of law in my native land.

Before the current administration, it had always been easy to condemn the "good Germans" who did nothing while Jews, Gypsies and others were rounded up for extermination. One likes to believe that one will be different, will harbour Anne Frank in one's secret annex, smuggle people across the border, defy the authorities who do evil. Those we scornfully call good Germans merely did little while the mouth of hell opened up.

I now know the way that everyday life can be so absorbing, survival so demanding, that it seems impossible to do more on top of it or to drop the routine altogether and begin a totally different life. There is the garden to be watered, the aged parent in crisis, the deadline looming; but there are also the crimes against humanity waiting to be stopped. Ordinary obligations tug one way even when extraordinary ones tug the other way. The Bush administration is by no means the Third Reich, but it produced an extraordinary time that made extraordinary demands on US citizens, demands that some of us rose to - and too many did not.

Periodically, I would speculate on what was the most extreme and radical thing I could do to stop the illegal prison camp at Guantánamo; picture chaining myself to the gates of the Senate, becoming one of those activists who takes up residence outside the White House or takes over a TV station to get a message out. I wanted to do something so epic that it would turn the tide, stop the crime. Then I would consider that the best approaches were probably already being taken, by the heroic lawyers at the Centre for Constitutional Rights and other human rights organisations, and I would write another cheque and some more letters and feel a little futile and a little corrupt.

These days Americans seem to be waking up one at a time, groggy and embittered, from the hypnotic nightmare that was the Bush administration's one great success - spreading a miasma of fear and patriotic submissiveness that made it possible to mount an illegal and immoral war, piss on the bill of rights, burn the constitution and violate international charters on human rights and prisoners of war with widespread torture. None of the sleepers seems to remember that they were part of the legions who obeyed the orders to fear and hate - but we welcome the latecomers into our ranks anyway.

What took them so long? How could people believe that a fairly defanged country, one we had been bombing since the first Gulf war, was an apocalyptic menace in a world where most nations were well-equipped for mass civilian murder? A year ago, the turning point was marked by the comedian Stephen Colbert's volley of (accurate) insults delivered to Bush's face, in the guise of giving the keynote address at the Washington press corps' annual dinner. He was just aggressively ignored by the mainstream media. Perhaps Katrina turned the tide: the indifference, incompetence, and obliviousness of the federal government was so gross that its pedestal melted.

And there were others who were in resistance all along. I remember with admiration the Japanese-Americans who came out in the months after 9/11 to testify that they had been incarcerated en masse during the second world war, not for what they did but for who they were, and they were not going to remain silent as the same treatment was meted out to Arabs and Muslims. I remember the way that 20,000 of us in San Francisco came out to shut down the business district the day the war broke out, and the huge marches before and after. I remember the few congresspeople - mostly African-American - who dared to stand in opposition early on. I went to Camp Casey outside Bush's vacation home in Texas and spent a day with Cindy Sheehan, who gave her life over to stopping the war after it took her soldier son. Others did as she did. Some of them are my friends.

There is resistance. But if it were enough, the crimes would have stopped, the war would have ended. When it does and they do, some will have been heroes. Some will have been honourable but moderate, in times that did not call for moderation. And some will have consented, through inaction, to crimes against humanity.

· Rebecca Solnit is the author of Hope in the Dark: The Untold History of People Power, and Wanderlust: A history of walking

It is a symbol of American cronyism, the beneficiary of lucrative Iraq contracts thanks to its relationship with Dick Cheney. Now Halliburton is relocating to Dubai - and US politicians are outraged.

By Andrew Buncombe

Published: 14 March 2007

The story begins in 1919 with Erle Halliburton sitting up late one night with his wife, Vida, worrying about money. Squeezed together in their one-room home in the Oklahoma dustbowl town of Wilson, the couple were trying to work out how to meet the next payment on Halliburton's fledgling business, the New Method Oil Well Cementing Company.

At about 1am, so the story goes, the pale light from a small lamp reflected off his wife's wedding ring. "I sat there admiring it when the thought came to me," Vida would later tell Jeffrey Rodengen, author of The Legend of Halliburton. "Here is the money we need. At first hubby would not listen to me... but I argued we could get it back. So we went to sleep all thrilled with the new idea of cementing, the new means of getting jobs, and the money."

The rest, as is so often said, is history. Halliburton pawned his wife's wedding ring and set to work servicing drilling operations not just on the Healdton oilfield close to where they lived in Oklahoma, but also in Louisiana and Texas. The following year he changed the company's name to the Halliburton Oil Well Cementing Company.

Today, almost 90 years after Vida Halliburton's eyes glanced upon the gold band around her finger, the company that took the family name is now a vast multinational with operations in more than 120 countries. It enjoys a remarkably close relationship with the Bush administration whose Vice-President, Dick Cheney, was its CEO between 1995 and 2000, and holds no-bid contracts worth billions of dollars. Last year it made $2.6bn (£1.3bn) in profits from revenues of $22.6bn.

But Halliburton also comes with plenty of controversy and the company has been at the centre of numerous inquiries over alleged accounting malpractice, suspicious payments to officials and overcharging. It has been accused of breaching US sanctions that prohibit companies from operating in places such as Iran and was also blamed for damaging the historic Iraqi site of Babylon, where it helped establish a US base. Currently the company is being investigated by the Justice Department and the Securities and Exchange Commission over allegations of improper dealings in Kuwait, Nigeria and Iraq. And this week the company fuelled even more controversy when it announced that it was moving its chief executive and its corporate headquarters from Houston, Texas, to Dubai in the United Arab Emirates. It has insisted that it would remain incorporated in the US - actually in the state of Delaware - and that its move would not affect its tax position. It also emphasised that it would retain a corporate office in Houston from where most of its executives would continue to operate.

But news of the proposed move, announced at the weekend, has brought an immediate and bitter backlash. A number of senior Democrats have accused the company of nothing less than a blatant attempt to avoid both paying US taxes and the heat of the ongoing federal investigations into its business operations. How could a company that had benefited from so many government contracts, they asked, simply up and leave? There were vows that Congress would launch new investigations.

The outrage was led by no one less than Senator Hillary Clinton, one of the leading contenders for the Democratic nomination for president. "I think it's disgraceful that American companies are more than happy to try and get no-bid contracts, like Halliburton has, and then turn around and say 'But you know, we're not going to stay with our chief executive officer, the president of our company, in the United States any more'," she said at a press conference in New York.

"Does this mean they're going to quit paying taxes in America? Is this going to affect the investigations that are going on? Because we have a lot of evidence about their misuse of government contracts and how they have cheated the American soldier, cheated the American taxpayer. They have taken money and not provided the services."

Democratic Senator Patrick Leahy of Vermont said the move was "an example of corporate greed at its worst". He added: "This is an insult to the US soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges all these years. At the same time that they're avoiding US taxes, I'm sure they won't stop insisting on taking their profits in cold, hard US cash."

Halliburton dismisses the criticisms. Announcing the company's decision at a regional energy conference in Bahrain, the company's president, chairman and CEO, Dave Lesar, said the move reflected the growing importance of the Middle East and the Asian energy markets. Last year more than 38 per cent of Halliburton's $13bn oil field services revenue came from the eastern hemisphere.

"As we invest more heavily in our eastern hemisphere presence, we will continue to build upon our leading position in the North American gas-focused market through our excellent mix of technology, reservoir knowledge and an experienced workforce," he said. "The eastern hemisphere is a market that is more heavily weighted toward oil exploration and production opportunities and growing our business here will bring more balance to Halliburton's overall portfolio." The company also insists that it will gain no tax advantage from the move, as it will remain legally incorporated in the US.

In a statement to The Independent, a company spokeswoman, Melissa Norcross, said: "These assumptions and suppositions are absolutely untrue and unfounded. Halliburton is, and will remain, a US corporation, incorporated in Delaware, with its principal executive office in Houston, Texas. As such, we anticipate absolutely no tax benefits from this decision."

Halliburton, which is in the process of spinning off its KBR arm, has long enjoyed a close relationship with the Bush administration, and indeed, with previous US governments. It has most recently been in the public eye for its contracts in Iraq - the Logcap (or Logistics Civilian Augmentation Programme) under which it provides military support services such as meals, laundry and fuel supplies and the Restore Iraqi Oil (RIO) contract. Reports say the estimated value of the contracts stands at more than $25bn. A number of its contracts were awarded on a no-bid basis - which drew criticism not just from watchdogs but from other companies seeking their share of the spoils of the so-called Iraqi "reconstruction" projects.

Industry observers say Halliburton enjoys a near unique position within the US corporate world. "People always look at Dick Cheney and say he is the poster-boy of cronyism but at a bureaucratic level there has also been a lot of revolving doors from the Army Corps of Engineers to Halliburton or else consultants to Halliburton," said Charlie Gray of HalliburtonWatch.Org, a project of the Centre for Corporate Policy, a non-profit group based in Washington. He added: "Given the multiple ongoing investigations into Halliburton's alleged wrongdoing, policy-makers should closely scrutinise Halliburton's latest move, and whether it will allow the company to further elude accountability. Moreover, this underscores the need for Congress to bar companies that have broken the law, or avoided paying taxes, from receiving federal contracts."

Pratap Chaterjee, director of CorpWatch, another watchdog organisation, agreed that Halliburton's position was remarkable. But he said the company was not simply close to the Bush administration - to which it has been a sizeable political donor - but that it had enjoyed a relationship with previous US administrations. He pointed out that KBR's predecessor, Brown and Root, had operated in Vietnam and had faced similar accusations of over-charging and corruption as well as allegations that it was too close to President Lyndon Johnson. Indeed, a young Illinois congressman called Donald Rumsfeld travelled to Vietnam to investigate such allegations. Brown and Root also won contracts from President Bill Clinton for work in the Balkans. Long before that, Erle Halliburton, who died in 1957, had loaned his yacht to the US military during the Second World War.

"They are somewhat unique in that their former CEO is now the Vice-President," said Mr Chaterjee. "They are somewhat unique in that they have a long relationship with US governments. It's not limited to the Bush administration." Mr Chaterjee, along with some industry analysts, believes the move to Dubai could make sense from a business point of view alone. "There's not much oil in Texas any more," Dalton Garis, a US energy economist at the Petroleum Institute in Abu Dhabi, told the Associated Press. "Halliburton is in the oil and gas industry and guess what? Sixty per cent of the world's oil and gas is right here. If they didn't move now, they'd have to do it later."

Yet others have pointed out that even if the company remains incorporated in the US and eligible to pay some US taxes there are likely to be financial benefits of moving to Dubai, a boom city, whose tax-free zones have lured around a quarter of the Fortune 500 top companies to establish corporate headquarters there. Sarah Anderson of the Institute for Policy Studies, said: "With today's technologies, there's no real reason to have to physically relocate. Those that have are trying to evade US oversight and tax authorities. And Dubai is a tax-free haven - no corporate or employee taxes. Halliburton claims this is not a big deal, but I can't imagine Lesar will be working over there alone in a little cubicle. This will be a much-expanded operation in Dubai." She added: "Despite the billions in US government contracts Halliburton has received, it has no loyalty or sense of obligation to US troops or taxpayers. I find it ironic that Lesar is going to the same place as one of the only other individuals who's received even more bad publicity in recent years - Michael Jackson."

The controversy is not going to go away any time soon. Congressman Henry Waxman, the Democrat who heads the House Oversight and Government Reform Committee, is poised to announce that he will hold an inquiry into the proposed move.

India, from a long-term perspective, has every reason to be concerned about the Acquisition and Cross-Servicing Agreement between the U.S. and Sri Lanka. THE TEN-YEAR Acquisition and Cross-Servicing Agreement (ACSA) signed by the United States and Sri Lanka on March 5, which provides for among other things logistics supplies and re-fuelling facilities, has major ramifications for the region, particularly India.

However, New Delhi's silence on the development is a reflection of the changed geo-political environment in the post-Cold War era with the emergence of the U.S. as the sole superpower. The new dynamics in India-U.S. ties could be another reason for South Block's silence.

For all the sophistry and spin by the Americans, the ACSA is a military deal and, on the face of it, is loaded in Washington's favour. For the U.S., it is as good as acquiring a base in the Indian Ocean and at little or no cost. In the immediate context, the ACSA suits the Mahinda Rajapaksa Government as an advertisement of its influence with the superpower in general and in its fight against the Liberation Tigers of Tamil Eelam in particular.

Just a few years ago, such an agreement would have been inconceivable given the sensitivities of India in view of the geographical proximity of Sri Lanka. For example, the grant of permission by Colombo to Voice of America to establish its transmitter in the island and the leasing of oil tanks in Trincomalee port to pro-American firms were major bones of contention between India and Sri Lanka for decades.

Both the subjects were covered elaborately in the exchange of letters between Prime Minister Rajiv Gandhi and Sri Lanka's President J.R. Jayawardene as part of the 1987 Indo-Sri Lanka Accord. The key element in the letters was the agreement that given "the importance of nurturing this traditional friendship, it is imperative that both Sri Lanka and India reaffirm the decision not to allow our respective territories to be used for activities prejudicial to each other's unity, territorial integrity and security."

The provisions of the ACSA cannot be described as being detrimental to New Delhi's interests in the current phase of its relations with Washington.

However, in a possible new context India has every reason to be concerned about the pact. A brief summary of the nature of the agreement will illustrate this.

Sri Lanka is the 90th country to sign an ACSA with the U.S.; Washington had been keen on such an agreement for years. The fact it took so long for Colombo to join the ACSA club is illuminating. The agreement provides a framework for increased inter-operability to transfer and exchange logistics supplies, and support and re-fuelling services during peacekeeping missions, humanitarian operations, and joint exercises.

The U.S. is engaged in these operations in different parts of the globe. Sri Lanka, a nation of 20 million saddled with an ethnic conflict, does not have the capabilities or infrastructure for such ventures even if it desired. The definition of some of the operations under the ASCA could be politically tricky. Iraq and Afghanistan are a case in point. Are the U.S. and its allies engaged in peacekeeping operations or waging a war in Iraq and Afghanistan? The answer will depend on who is posing the question to whom.

The categories of allowable goods and services include food, petroleum, and transportation. Of course, the provision of weapons systems or ammunition is expressly prohibited under the agreement. There are examples galore where food and fuel have been used as weapons. Indeed, there are safeguards in the pact that logistics support allowed under it cannot be transferred beyond the forces of the receiving party without consent of the providing party. And all transactions must be mutually agreed upon before any transfer is made.

However, is a foolproof mechanism possible to ensure compliance in letter and spirit of such accords particularly for smaller countries in dealing with a superpower?

Curiously, the signatory to the document from the Sri Lankan side was Gothabaya Rajapaksa, Defence Secretary and brother of the President. The American side was represented by its envoy in Colombo, Robert Blake. The ACSA comes under the Pentagon's jurisdiction. Though the signing ceremony took place in Colombo, the Sri Lankan Government did not deem it necessary to issue any statement on the subject. The Ministries of Defence, Foreign Affairs, and Information merrily circulated the press release issued by the U.S. Embassy in Colombo on the deal.

Sununu calls for Gonzales' dismissal

By LAURIE KELLMAN, Associated Press Writer 38 minutes ago

Sen. John Sununu (news, bio, voting record) of New Hampshire on Wednesday became the first Republican in Congress to call for Attorney General Alberto Gonzales' dismissal, hours after President Bush expressed confidence in his embattled Cabinet officer.

"I think the president should replace him," Sununu said in an interview with The Associated Press.

Gonzales has been fending off Democratic calls for his firing in the wake of disclosures surrounding the ousters of eight U.S. attorneys.

Austrian Bank Scandal: When Socialists Play With MoneyFrom the desk of Chris Gillibrand on Tue, 2006-04-04 22:53

A major banking scandal is rocking the Austrian political elites – left and right. A bank owned by the Socialist trade union (which is close to the Socialist Party SPÖ, currently in opposition) loses billions in shady hedge deals while the union strike fund evaporates in the Caribbean and the bank gets implicated in a corruption case in Israel. Meanwhile the bank is financed by the European Investment Bank (EIB), and an Austrian Finance Ministry official (married to the Socialist ex-chief of the bank) ignores a crucial report and is appointed to the Executive Board of the European Central Bank (ECB). The Conservative Finance Minister claims to know nothing – after just having sold the Government-owned Post Office Savings Bank (PSK) to the socialist bank. Welcome to Austria, presently presiding the European Union council of ministers.

Let me introduce!

The Bank für Arbeit und Wirtschaft AG, BAWAG or in English, ‘Bank for Employment and Commerce’ was founded in 1922 by the Socialist Chancellor Karl Renner. Up until now the majority stakeholder in the Bank has been the Austrian Trades Union Federation, the ÖGB. With the repurchase of the shares of the Bayerische Landesbank in 2004, it is now wholly-owned by the ÖGB. The bank’s original intent, from which it has strayed far, was to extend cheap credits to the needy.

Almost all of the members of the BAWAG Supervisory Board are fully paid up socialists and trade unionists. The two exceptions are Albert Hochleitner, the ex-CEO of Siemens Austria, and Leo Wallner, the chairman of the state-owned monopoly, Casinos Austria. Günter Weninger, chairman of the Supervisory Board, who has now been forced to resign, also has a day job as the Finance Chief of the ÖGB. He started professional life as an electrician which has given rise to suggestions in the Austrian press that he might have to return to his original trade. The Managing Board has eight members, four of whom have now resigned. The CEO, Johann Zwettler had already resigned in October 2005. He and his predecessor, Helmut Elsner, are now under police investigation.

...

Make of note of Casinos Austria's CEO sitting on BAWAG's board, as it will figure in heavily once we get to Arafat's "Oasis Casino".

Continuing...

...BAWAG opened up operations in the Caribbean in 1995 under the direction of Wolfgang Flöttl, the son of the then CEO, Walter Flöttl. The idea was that these investments should hedge risk. When it was made public that the son received $2 billion from BAWAG without the father seeking the formal approval of the Supervisory Board, the Caribbean business got closed after a year. The extent of Supervisory Board knowledge is still questioned.

After the departure of Flöttl Senior, the business was then reopened by Flöttl’s successor, Helmut Elsner, with Supervisory Board approval after only one year. Elsner was already known as Flöttl’s "man for big business." Living well, he enjoyed a service penthouse provided on the top of the BAWAG offices in Vienna as had his predecessor, Flöttl. Also provided with a penthouse was the head of the socialist trade union ÖGB, Fritz Verzetnitsch.

This time around, Flöttl Junior invested in high-risk funds and the business clocked up a massive loss of almost €1 billion which threatened the solvency of BAWAG in 2000. The Bank was only saved by a guarantee from the ÖGB (trade union dues amount to 1% of members salaries, so they have accumulated quite a lot of money to play with). The losses themselves were systematically covered up in offshore accounts in the Caribbean and accounts at a US futures broker called REFCO. The union strike fund went walkabouts as collateral in the Caribbean and disappeared....

There's much more interesting info on BAWAG in that article, so be sure to check it out.

These kinds of mega deals pretty amazing when you consider that Cerberus, starting with $10 million in capital in 1992 started off investing the high-risk corporate debt market, moving into outright acquisitions and management of small distressed companies. The purchase of the ailing BAWAG by Cerberus is also somewhat ironic given that BAWAG, in coordination with Refco, was a significant player in the PIPE (Private Investment in Public Equity) market. The PIPE market often act as a source of last resort role for small-cap companies in need of a capital infusion.

And, it turns out, one of the figures involved in with the BAWAG/Refco dealings in the PIPE Market, is the Austrian billionaire Martin Schlaff that will come up quite a bit in Ariel Sharon's scandals.

....Starting in 2000, however, Xybernaut increasingly turned to a newly popular financial instrument to keep growing -- and going: so-called PIPE deals, short for "private investments in public equity." In such deals, private investors are granted warrants or convertible debentures for stock at below-market rates in exchange for financing. All the investor has to do to make money is sell the stock. But some sleazy PIPE financiers go a step further by shorting the stock of the companies they finance, driving down share prices, diluting the shares of other investors, and even -- in a particularly egregious form of illegal short selling known as the "death spiral finance scheme" -- driving the company into bankruptcy through aggressive rounds of financing and short selling. Between March and November 2000, Xybernaut went from 1 percent to more than 15 percent owned by institutional investors who acquired their stock in the company through private deals, according to media reports.

"It really rode the Internet bubble, and it was real hot stuff," recalls Gregory Sichenzia, of Sichenzia Ross Friedman Ference LLP, a law firm that specializes in securities and PIPE transactions, which he described as an increasingly traditional financing mechanism. "It’s not the fault of the financing that the company collapsed."

Several firms that financed Xybernaut during Allen’s tenure on its board, however, have since been linked to a complicated international network of troubled financers and brokers. For example, in April 1998, Balmore Funds SA and Liechtenstein-based Austost Anstalt Schaan signed a private placement deal with Xybernaut granting the firm up to $11 million. One of their registrations of stock for sale came April 4, 2000 -- shortly after the March price peak and a period of unusually high volume trading, which was followed by yet another "going concern letter," in mid-March, and a decline in the stock price. The signatory for Austost Anstalt Schaan was Thomas Hackl, who was from 1991 to 2002 head of treasury at BAWAG, the fourth largest Austrian bank (itself somewhat controversial for losing millions in the financing of Yasir Arafat’s casino outside Jericho). TheStreet.com has linked BAWAG to Austost and also to the hedge fund Alpha Capital Aktiengesellschaft, which invested in Xybernaut in 2001. Last year Hackl became a major figure in the collapse of Wall Street brokerage the Refco Corp., where he was executive vice president, in an accounting scandal that wiped out more than $1 billion in shareholder value....Despite the plethora of dubious characters surrounding Xybernaut, the true identity of many of the company’s financiers remains obscure. In the company’s heyday, its officers claimed to have the support of major Wall Street firms, but that was more hype. What SEC records show instead is that during the company’s 16-year history, it relied heavily on offshore firms for financing. And during Allen’s board tenure, it received the vast bulk of its money from outfits based in the most notorious havens for tax cheats and money launderers: the Turks and Caicos, the Cayman Islands, the British Virgin Islands, the Bahamas, Liechtenstein, and Israel....

So that's the interesting set up connections between BAWAG, Refco, Martin Schlaff, and George Allen. And if you're interesting a very long read on BAWAG, the Refco collapse, how this all relates to the Enron scandal, and the dangers associated with the unregulated explosion in the use of derivatives and hedge fund go here and here.

An Oasis of naughtinessNow let's move on and take closer look at the Oasis Casino in Jericho and it's complicated dealings with the BAWAG, Refco, and figures close to Ariel Sharon with this June, 2006 Bloomberg article:

Refco Bank Hid $1 Billion Loss From Hedge Funds, Arafat Casino

June 22 (Bloomberg) -- At the Israeli army checkpoint on the edge of Jericho, gamblers from Jerusalem and Tel Aviv streamed into the West Bank town to wager on blackjack, play poker and face off with slot machines at the Palestinian-run Oasis Hotel Casino Resort. The casino was open 24 hours a day, seven days a week.

The party that started in September 1998 ended when a Palestinian uprising scared away customers in October 2000, forcing the casino to close within a month.

The Israeli shells that punched holes in the Oasis's stucco- and-black-glass facade also struck a financial blow to one of the casino's investors, Vienna-based Bawag PSK Bank -- the same bank that backed Refco Inc., the New York-based brokerage that collapsed last October after belatedly reporting $430 million in hidden losses.

...

Drexel Burham Lambert, BTW, is where Cerberus found Stephen Feinberg got his start in the 80's. Skipping down in this lengthy and excellent article, we'll see how Martin Schlaff helped bring together BAWAG and Yasser Arafat in the Casino deal. Keep in mind that, as we're going to see, Schlaff is also a primary figure in the Ariel Sharon bribery scandal ...

...Risky VenturesFollowing the probe, Walter Flottl retired in 1995, handing the bank's leadership to Elsner. The new CEO expanded Bawag's relationship with Refco and started other risky ventures.

Elsner found such an investment in the Palestinian territories. Arafat, as president of the Palestinian Authority, was on the hunt for ways to develop the local economy after the 1993 Oslo Accord created the framework for Palestinian autonomy in the West Bank and Gaza, former Finance Minister Salam Fayyad says.

Austrian investor Martin Schlaff helped bring Bawag together with Arafat's advisers to build a casino in Jericho, according to Palestinian Authority records that list Schlaff as a board member and officer of the casino.

Schlaff was one of Bawag's biggest customers. Schlaff declined to answer written questions submitted to Michael Fink, his spokesman in Vienna.

On Dec. 17, 1996, Palestine Commercial Services Co., an investment company controlled by Arafat, signed an agreement with a group of Austrian investors, including Bawag, according to a report on the investment's history and financial value commissioned by the Palestinian Authority.

Oasis

The casino would be owned by CAP Holding AG, a Liechtenstein- based company whose shareholders were Bawag, with 11 percent; Vienna-based Casinos Austria International, with 16.5 percent; Palestine Commercial Services, with 23.1 percent; and a company called MS Privatstiftung -- controlled by Schlaff -- with 49.5 percent, according to Palestinian Authority and Casinos Austria documents.

Casinos Austria ran the Oasis, along with 62 other casinos in 17 countries and nine gambling ships.

...

Seven months later, on Sept. 28, violence erupted in Jerusalem as Ariel Sharon, then head of Israel's opposition Likud Party, visited the plaza that contains al-Aqsa Mosque, the third- holiest site in Islam, and the Western Wall, the most sacred location in Judaism.

Casino Closed

An uprising spread throughout the West Bank and Gaza, and in the following month, the casino closed. The hotel stayed open, with managers herding guests, including women and children, into the basement for hours at a time during gun battles.

...

With no customers at the gaming tables, the value of the casino plummeted. Still, Bawag engineered a transaction that -- for accounting purposes anyway -- transformed a stricken investment into one worth 120 million euros, Bawag's nonprosecution agreement says.

...

The article goes on to provide further details on the financial trickery employed to hide the BAWAG's losses in Oasis Casino.

Sharon's campaign finance funNow we're going to move on, and take a look at Ariel Sharon's campaign loan scandal with this May 2004 Jpost article:

During negotiations with the Labor Party in October 2000 over thepossibility of the Likud joining a national unity government, Ariel Sharonwas asked by attorney Dov Weisglass, today his bureau chief, to speak with then premier Ehud Barak over the possibility of reopening the casino in Palestinian-controlled Jericho, The Jerusalem Post has learned.

The casino is jointly owned by the Palestinian Authority, Casinos Austria,the Austrian bank BAWAG, and Austrian-Jewish businessman Martin Schlaff, akey figure in the ongoing police investigation of the prime minister and his son, Gilad. "At the time I did not think anything was too strange with Weisglass's request, since at the time we knew that he was an attorney for the casino," said one of the participants at a meeting in October 2000 at the Sharon ranch. "But now, with the allegations that Sharon may have received bribes from Schlaff, the meeting and the request seem suspicious."

...

Following his victory in the 1999 Likud Party leadership primaries, Sharon went into debt to repay NIS 4.7 million in illegal campaign contributions. Gilad Sharon received a $1.5 million loan, originating in Austria, from South Africa-based businessman Cyril Kern in order to repay another loan the family had taken out in order to return the illegal donations....

...The police are investigating the possibility that Kern served as a front man for Schlaff, another friend of Sharon's, and a businessman heavily invested in Israel, who could have made the loan in the hope that Sharon would make decisions favorable to his business interests, including the reopening of the Jericho casino.

"We met to talk about whether Sharon should join a unity government withBarak, and Weisglass told Arik to pressure Barak into reopening the casino," the source said. "They agreed that if Sharon joined the coalition, then they would ease restrictions on the Palestinians in Jericho in order to inadvertently allow for the casino to reopen."...

A quick summary

The article goes on to provide many other details on this case, but let's just summarize some of what we've seen thus far regarding this Casino:

So Martin Schlaff, and Austrian billionaire and friend of Sharon, invested heavily in a casino venture in Jericho along with Yasser Arafat. Another investor in the casino was BAWAG, the bank of the Austria trade unions that imploded in the joint Refco and embezzlement scandals. Both Schlaff and Casinos Austria were major investors in BAWAG.

Sharon's close adviser and chief of staff Dov Weisglass. Weisglass was also involved in setting up some shell companies used to funnel campaign money to Sharon back in 1999. When Sharon was forced to pay back that money, he received a $1.5 million loan from a South African, Cyril Kern, that was believed to be acting as a front man for Martin Schlaff. The loan, with flowed through BAWAG accounts, is believed that the loan represented a bribe to encourage Sharon to allow the reopening of the Oasis Casino, which had been closed down due to the the second Intifada.

Oh, and Cerberus, the large hedge fund that is a major force in Israel's economy, recently bought BAWAG, which was put up for sale by the Austrian trade unions in order to cover their losses over the BAWAG/Refco twin implosions.

On a tangential note, while the involvement of Sharon's close aide in a business deal with Yasser Arafat may seem like an example of strange bedfellows, it's not quite as unusual an arrangement as one might think. Take, for example, Silvio Berlusconi, a major Bush backer and Iraq war supporter: His Swiss-investment adviser, Pier Felice Barchi, doubled as the lawyer for the al-Taqwa, the Muslim Brotherhood's bank! (More on that here) And then there's the GOP's own Muslim-Brotherhood-linked Get-out-the-vote operation.

So now that we're sort of caught up with all this, let's complicate it some more!

An Austrian lawmaker is calling for a formal inquiry into charges that Vienna is blocking an Israeli investigation of alleged campaign finance violations by Prime Minister Sharon — purportedly in exchange for Jerusalem’s agreement to restore diplomatic ties with the alpine nation.

...

Pilz said further investigations could be on the way. He said Justice Ministry officials had told him they were considering launching further investigations into allegations that the Austrian government had used money channeled via Austria to Sharon from a South African businessman, Cyril Kern, to influence Israeli policy. He did not specify what sort of influence his government might have been seeking.

...

Speculation has been rife in the Israeli press in recent days that Sharon agreed to restore ties with Vienna only after an Austrian judge rejected several requests from Israeli police to subpoena bank records related to the Sharon investigation. Israeli police have asked to see records of a possible transfer of funds from Vienna’s Bawag Bank to a Tel Aviv bank account owned by the prime minister’s sons.

An Austrian judge has twice rejected Israeli requests to examine the bank records. The first request was rejected because the Israeli request came in an incorrect format. The second was rejected on grounds that foreign campaign financing is not a criminal offense in Austria. There were reports that a third request had been made on Wednesday, but it could not be confirmed by press time.

...

Israeli newspaper reports have suggested that Justice Ministry officials connected to the far-right Freedom Party might have played a role in Austria’s rejection of the Israeli subpoena requests. Pilz noted that the rejection had come from a judge, not a ministry official.

...Sources in Jerusalem told the Forward that Sharon had been personally involved in calling for an upgrade of diplomatic relations with Austria. Moreover, the sources said, the decision was pushed by the political appointees within the Foreign Ministry rather than by the professional staff, which had allegedly rejected the restoration of ties last November and eventually acceded two weeks ago.

Israel downgraded its ties with Austria in 2000, together with members of the European Union, after the Freedom Party, then led by far-right activist Jorg Haider, was brought into the governing coalition. Haider has since resigned from the party leadership, leading European countries to restore ties. However, the Freedom Party remains in the coalition, which Israel had until last week cited as a reason for continuing the chill. Critics have called on the government to explain its shift....

Avigdor Friedman, a far-Rightist friend of Martin SchlaffWhile Mr. Schlaff may claim his investment in the Oasis Casino was intended to promote peace between the Israelis and Palestinians, his investment in Avigdnor Friedman probably doesn't fall in the category of peace-promotion:

The police have been conducting a lengthy inquiry into suspicions that Transportation Minister Avigdor Lieberman has an illegal business relationship with Austrian businessman Martin Schlaff, who has substantial business interests in Israel....Haaretz has learned that several years ago, during a special session of an Austrian parliamentary committee investigating that country's intelligence services, information came up regarding business connections between Martin Schlaff, the Austrian businessman who is believed to own 50 percent of the Jericho casino, and Lieberman, and how money was transferred to the political party Lieberman established, Yisrael Beitenu....

One of the main constituents for the Yisrael Beitenu party that Liberman formed are disaffected Likudniks that feel Likud just isn't right-wing enough.

In 2002, Lieberman called for the bombing of Palestinian gas stations, banks, and commercial centers in response to suicide bombings. In 2004, he pitched the "Lieberman Plan" that essentially involved complete separation of Arab and Jewish populations. In October 2006, Lieberman joined Ehud Olmert's cabinet in the position of "Minister of Strategic Threats", which was created primarily to deal with Iran's nuclear ambitions.

Along with Schlaff, another figure that has assisted Lieberman and his party is top GOP strategist Arthur Finklestein.

...Far from his nakedly anti-Arab approach disqualifying him from the political mainstream, Lieberman is today its rising star. He was welcomed into the ruling coalition in October as "minister for strategic threats" and is now the main ally and crutch of faltering Prime Minister Ehud Olmert.

An immigrant from the former Soviet Union who lives in the illegal West Bank settlement of Nokdim, Lieberman is stoking anti-Arab sentiment and exploiting insecurity and disillusionment after the fiasco of last summer's Lebanon war. Top office, or at least the Defense Ministry, is a realistic goal for Lieberman, a shrewd political tactician who helped Benjamin Netanyahu gain election as Prime Minister in 1996 and served in Ariel Sharon's Cabinet. "If elections were held now, based on the polls, he could presumably be either prime minister or demand any other ministry he wanted," says Yossi Alpher, former director of the Jaffee Center for Strategic Studies.

If Lieberman's pronouncements are to be taken seriously--and there is no obvious reason they should not be--a Lieberman government would exclude some Arab citizens from Israel, would expel others who refuse to sign a loyalty-to-Zionism oath, would turn Gaza into Grozny and would execute Arab members of the Knesset who talk to Hamas or mark Israel Independence Day as the anniversary of the displacement of the Palestinians in 1948.

Many Israelis--and many Americans--are sleeping through the rise of Lieberman. Others are through their actions facilitating the ascendance of fascist ideas in Israel. Lieberman is more than kosher as far as Washington is concerned. Secretary of State Condoleezza Rice welcomed him at the State Department on December 11, a day after he was featured at a forum, sponsored by the Brookings Institution's Saban Center, that also included Bill Clinton, Senator Hillary Rodham Clinton and several other members of Congress....

So yeah, fascism appears to be on the rise in Israel as the public turns sour on corruption. Whoopy! And neither is Lieberman the only proto-fascist whose star is rising...

A RUSSIAN-BORN billionaire wanted by French authorities for alleged arms trafficking yesterday positioned himself as potential kingmaker of Israel by announcing a new "social movement" that will give expression to his growing political clout.

Arkady Gaydamak - who has gained a degree of popularity in Israel with a series of high-profile philanthropy projects amid deepening public disgust with established politicians - told The Scotsman last night that his "Social Justice Movement" would enable him to influence politicians without holding public office.

Mr Gaydamak, 54, says he does not have the experience or desire to hold high office. He says the person best suited to be prime minister is Benjamin Netanyahu, leader of the right-wing Likud party....A 2002 study by the non-profit Centre for Public Integrity, based in Washington, described Mr Gaydamak as "an entrepreneur with global ties to arms smuggling, resource exploitation and private military companies"....

We should note that one of the conflicts in which Mr. Gaydamak sold his wares was the diamond-fueled Angolan civil war in the 90's. And while Gayadamak was selling his arms to the Angolan government, it was none of than arms-smuggler extraordinaire Victor Bout that was selling to the UNITA rebels. (For more on the most mysterious and important Bout empire, go here and skip down to the section "What the arms trade is all about")

Continuing...

...Israeli analysts see Mr Gaydamek's alliance with Mr Netanyahu as a milestone in the country's politics. Approval ratings for the prime minister, Ehud Olmert, are plummeting after the debacle of last summer's Lebanon war and corruption scandals, while the right wing is rising in popularity. Mr Gaydamek, they say, can deliver to Mr Netanyahu a large chunk of the crucial Russian-speaking immigrant vote, while Mr Netanyahu can offer Mr Gaydamak access to the pinnacle of power.

"Gaydamek has huge resources and can buy up Israeli politics and politicians," says Danny Gutwein, a historian at Haifa University. "He will enlist the Russian vote for Netanyahu. Basically, capitalism will replace democracy."...

Capitalism will replace democracy, eh? Its sounds kind of a like fascism. It also sounds in keeping with what's been taking place across in democratic countries across the world. But as this recent article suggests, Israel's march toward fascism and into the embrace of oligarchic right-wing ideologues just might happen sooner rather than later:

Is Israel Falling Apart?By Dror Wahrman

Mr. Wahrman is Ruth N. Halls Professor of History and Director of the Center for Eighteenth-Century Studies at the Indiana University History Department (adjunct in English, Jewish Studies, Cultural Studies).

Foreign observers of Israel tend to focus so intently on the dangers the country faces from its Arab neighbours that they have largely missed an astonishing story that has been accelerating over the past few months: that of the Jewish state’s possible move toward internal collapse. If you consider this an exaggeration, just take note of what the past couple of weeks have brought about. A few days ago the chief of the Israeli police resigned after an investigation that found several of Israel’s highest police officers guilty of corruption and negligence. This came within a week of the forced resignation of Israel’s Chief of Staff from the military because of the fiascos of the second Lebanon war. It was also some ten days after Israel’s minister of justice was convicted of sexual assault while on duty, and a couple of weeks after Israel’s president – who holds a largely symbolic position – resigned temporarily following charges of rape and sexual misconduct. It was also the same day that the head of Israel’s tax authority resigned because of possible corruption charges. In the meantime, several other investigations are still pending, not least two or three directed at the Prime Minister himself, Ehud Olmert, concerning corruption and favoritism. And an appeal to the Supreme Court has already been filed against the minister of police’s choice for a new police chief – again, because of old charges of corruption of which the nominee had been acquitted only through a particularly narrow benefit of the doubt....

...Do these events really presage the collapse of the Israeli system of governance and democracy? There certainly has never been such a deep crisis of leadership in the country that touts itself as the only democracy in the Middle East. The leader of the ruling parliamentary coalition, Avigdor Yitzhaki, said so publicly a few days ago. And the Minister of Education has suggested that all schools devote special classes to the "government crisis", so that children can speak out about what might well seem to them like a total collapse of all systems that control their lives. Suddenly the Palestinians and the Hizbullah, and even Iranian nukes, have taken a back seat: Israel does indeed seem in danger of imploding from within, at least as a viable democracy....

We're going to end this random walk through corrupt history with a couple more interesting links on the topic of the fascist elements in not only Israel's politics and a plug for a public radio fundraiser :-P.

The first link is to a one minute video clip by anti-fascist researcher Dave Emory on the topic of the fascist elements of Zionism. It's a excerpt from The First Refuge of a Scoundrel - The Relationship Between Fascism and Religion, a two hour talk on the topic of religion and fascism he recently gave. The video is available as part of the fund drive for WFMU, a non-commercial, freeform radio station broadcasting at 91.1 FM in Jersey City, NJ. If you tune in during the today (Tuesday, March 13), from 6-7 PM EST (which you can do online here), and make a $75 dollar donation to the station, you can a DVD of the talk thrown in as "swag". Yay!

And the second link is to another Dave Emory show from back in November of 1998, The Republican Party and International Fascism (audio here). It's a half hour show cover the GOP's very real history of working with fascists. It also discusses, ~18 minutes into the show, an interesting 1998 meeting of far-Rightists in Italy that include not only American far-Rightists, but Israeli far-Rightists. It's a useful reminder that, when we're talking about fascism and its history, we inevitably are talking about a larger global movement with cooperation that transcends borders and religions. Authoritarian thugishness, it appears, is a powerful unifying force.

COLCHESTER -- Caitlin Dean was raised not to discriminate against others because of their race or religion. But as a white suburban teen of Italian and Irish descent, she often wondered what it would be like to be the target of such abuse.

She found out "behind the burqa."

The 15-year-old freshman volunteered with a few other students to wear traditional Muslim clothing to school for an entire day in February after a Middle Eastern Studies teacher at Bacon Academy announced that she was looking for students to promote her class by wearing the garb. Caitlin covered her slender frame and short brown hair with a periwinkle burqa, which concealed her face.

The hateful and abusive comments she endured that day horrified teachers, the teen and many of her classmates. The remarks underscored a persistent animosity toward American Muslims that is driven largely by the terrorist attacks of 9/11 and the wars in Afghanistan and Iraq. But they also opened up an important dialogue that could help teenagers in Colchester and across the state view the Muslim culture differently.

"Hey, we rape your women!" one upperclassman said as he passed Caitlin in the hallway.

"I hope all of your people die," another sniped.

"You're probably going to kill us all" and "Why do they let people like this in the country?" were other remarks she heard on Feb. 1.

Caitlin's observations that day did not surprise those who work for the Connecticut chapter of the Council on American-Islamic Relations, which arrived in the state about three years ago in response to hate crimes and prejudice against Muslims.

Caitlin wrote down 50 comments and names she was called. She did not respond because "I am a freshman. I like to avoid making waves."

But when she saw a friend and a teacher who knew that Caitlin was the person under the burqa, she broke down in a classroom.

"I started crying," Caitlin said. "There is way too much prejudice."

The lack of understanding of Islam and of the many of the cultures that contribute to a worldwide population of more than 1 billion Muslims is something Rabia Chaudry, a spokeswoman for CAIR, planned to raise with the state Department of Education when she meets with officials in a few weeks.

Now she plans to use Colchester as a positive example in terms of discussing prejudice and raising awareness of the Muslim culture.

"I think what this teacher has done is exactly what schools should be doing," Chaudry said.

None of the students were singled out for discipline because no formal complaints were made.

"It's unacceptable," Superintendent Karen Loiselle said. "It's imperative students who are victims of those comments report them immediately and it will be taken very seriously. In this case, it has opened an important conversation."

Chaudry agreed and said her group would like to send representatives to meet with students in Colchester and other communities, to hold town meetings to talk about their feelings about Muslims, the war and terrorism.

At Bacon Academy, the experience has already made a difference. Teacher Angie Parkinson, who had only 12 students enrolled in her Middle Eastern Studies classes for next year, now has 48.

A partial list of the comments to Caitlin - some were not printable - appeared in the student newspaper, the Bacon Courier, along with a front-page story headlined, "Some at Bacon Fail the Test of Tolerance."

Caitlin called it "The Girl Behind the Burqa."

In the days that followed, teachers and students at Bacon Academy discussed tolerance of other cultures. There was already a Gay-Straight Alliance at the school with some openly gay members, a save Darfur group and a diversity committee.

Chris Anderson, a senior at Bacon who also wore some of the traditional Muslim clothing to school and also was the target of ethnic slurs, said educators are not trying hard enough to expose students to other cultures. He criticized school leaders for replacing world studies in middle school with more American history.

"The prejudice displayed at Bacon Academy is proof enough that education about world cultures cannot be ignored," he said. "The misunderstood are feared and hated."

CAIR is dedicated to promoting better understanding of Islam and Muslims through public education and interfaith cooperation and to defend American Muslims' civil and human rights, according to its website.

Chaudry said she is not surprised to hear how some students reacted to the burqas and other Middle Eastern outfits.

"I wear a regular head scarf and I get those reactions in public as well. I think people are confusing terrorists with Muslims," she said. "They don't understand the distinction because they don't understand the religion."

Parkinson, who has traveled to the Middle East and wants to participate in a teacher exchange with Saudi Arabia, said she is on a mission to have other cultures, particularly those in the Middle East, better represented in school curriculums.

"That happens to be my personal crusade," she said. "And I think we should start it sooner. It should be taught in elementary school.

"My fear of this hatred of Islam is that it will become synonymous with patriotism," Parkinson said. "We are a nation of immigrants. Some of the most disturbing comments were, `This is America. Go home.'"

In her class, Parkinson spends weeks explaining the history of the Middle East before she broaches the Iraq war.

There are plenty of examples of other incidents around the state that have not led to productive discussions, including a Muslim boy in New Haven County who was beaten up and called Osama Bin Laden, Chaudry said.

Many other incidents go unreported, she said. "I think a lot of times, [Muslims] just internalize it and go on."

Fulfilling a 60-year old Israeli dream and an American unwavering strategy, the 22-member League of Arab states are now in consensus on a potentially groundbreaking Arab Peace Initiative (API), which pledges their collective and full recognition of the Jewish state and full-fledged permanent peace in return for withdrawing the Israeli Occupation Forces (IOF) to 1967 lines, the establishment of an independent Palestine with eastern Jerusalem as its capital, and “an agreed, just solution” to the Palestinian refugee issue in accordance with United Nations Resolution 194, but both Washington and Tel Aviv are not forthcoming.

The API was a dramatic reversal of decades-long policy as well as a peace offensive. It was approved in Beirut in 2002 by the Arab leaders who reiterated their commitment thereto at their following annual summits. A meeting of their foreign ministers in Cairo earlier this month recommended to their upcoming summit in Riyadh on March 28-29 a renewal of their peace offer as a “strategic option.”

The historic potentials of the API were acknowledged by the international Quartet of Middle East mediators, comprising the U.S. , the U.N., the E.U. and Russia . In 2003 the U.N. Security Council Resolution 1515 cited the API as one of the terms of reference for making peace between Arabs and Israelis.

Arab leaders seemed recently to follow up on their initiative for the first time with a diplomatic offensive that started ahead of their Riyadh summit and is expected to resume thereafter. Their diplomatic campaign was spearheaded by Jordan ’s King Abdullah II’s visit to Washington DC and highlighted by his impressive and eloquent message to the U.S. Congress on March 7.

The API was for five years archived into oblivion on the shelves of the Arab League, rejected by Israel and ignored by the US , who in 2006 swiftly vetoed an Arab League move to revive peace making on its basis by entrusting the mission to the U.N. Security Council. A change of heart following the negative fallout of the Israeli war on Lebanon last summer moved Washington to perceive in the strategic Arab option a tactical tool “to recast the (regional) political landscape from the traditional one of Arabs versus Israelis … into a Sunni vs. Shiia alignment,” (1) thus opening a window of opportunity for Arab leaders to follow up on it.

Seeking to break through Israel’s rejection of their daring offer, the U.S.-allied Arab leaders have turned to Washington appealing for intervention and warning their offer could be the last chance to make peace otherwise the ideologies of hate and terror would plunge the Middle East into a wider conflict.

“Today, I must speak; I cannot be silent,” the Jordanian monarch repeated to U.S. lawmakers: “Sixty years of Palestinian dispossession, forty years under occupation, a stop-and-go peace process, all this has left a bitter legacy of disappointment and despair … It is time to create a new and different legacy.”

Indicating that thirteen years on since late King Hussein, his father, and Israeli Prime Minister, Yitzhak Rabin, were in Washington pursuing the cause of peace, the “work is still not completed,” the “ongoing crisis” has failed eleven American presidents and thirty American congresses, and incumbent President George W. Bush’s “vision’” of a two-state solution risks to remain merely a vision for ever, unless the U.S. rises up to the “challenge,” plays “an historic role,” and uses its “unrivalled” potentials and “unprecedented power” to seize on the “indeed historic, moment of opportunity,” made possible by the API.

“The wellspring of regional division, the source of resentment and frustration far beyond is the denial of justice and peace in Palestine ,” the king said. “We can wait no longer,” Abdullah II warned: “The status quo is also pulling the region and the world towards greater danger … the cycle of crises is spinning faster, and with greater potential for destruction … Any further erosion in the situation would be serious for the future of moderation and coexistence, in the region and beyond” and “we are all at risk of being victims of further violence resulting from ideologies of terror and hatred.” (2)

The Jordanian monarch’s message was also that of his Arab counterparts. He met with the Saudi Arabian and Egyptian leaders, King Abdullah and President Hosni Mubarak, ahead of his U.S. visit. What is more important in their warning message is that it is delivered by U.S.-allied friends, whose support is essential to bring other U.S. regional concerns to a successful conclusion. These leaders are now in the regional driving seat.

Their leading role as well as the U.S. paramount position in the region could be compromised by ignoring their warnings and the rare opportunity their initiative offers. Dealing adversely or passively with their peaceful alternative to violent resistance to the Israeli occupation is too risky. Especially the Saudi Arabian leader, King Abdullah, the original author of the API, has invested a lot of his personal weight and his Kingdom’s assets to win over Arab consensus on the initiative. He also succeeded in securing Hamas’ indirect subscription to it. Riyadh also won over Iran ’s support, according to the Saudi official news agency, or at least watered down the Iranian opposition.

Abdullah II’s appeal seems to have fallen on deaf ears on the Capitol Hill; so far it has created no official forthcoming reaction, thus providing the necessary inaction for Israel to act intransigently and demand practically the upcoming Riyadh summit adopt an Israeli version of the API.

Criticism of the six decade-old U.S. inaction strategy of crisis management was recently eloquently questioned: “Is a comprehensive Middle East peace in America ’s strategic interests? Put simply, what excuse would the US have for remaining in the region playing policeman if all in the garden were lovely?” (3)

This strategy has all along played into Israeli hands, backed up all Israeli expansionist wars justified by Tel Aviv as pre-emptive, preventive and defensive, but in the end boiled down to being simply aggressive military conquests with two major aims: to grab more Palestinian land for the ongoing colonial Jewish settlement and to maintain Arab land under Israeli occupation as a bargaining chip to blackmail and dictate further Arab concessions. This is the strategy that has been fuelling anti-Americanism among hundreds of millions of Arabs and Muslims because literary it has turned the United States into a partner to the Israeli 40-year old occupation.

The latest Israeli par excellence exploitation of this strategy was recently illustrated vis-à-vis the API.

Israeli Foreign Minister, Tzipi Livni, went this month to Brussels then to Washington to reconfirm Israel’s rejection of the Arab offer, citing two non-starters: First the stipulated “agreed upon, just” solution of the Palestinian refugees problem on the basis of the UN resolution 194, which is “contrary to the principle of two states,” and Second what she described as the Arab “dream” of withdrawing the IOF to their pre-1967 lines. Identifying these two points as “red line” she told AIPAC nonetheless the Saudi plan has “positive elements,” but the “original” Saudi plan, not the one adopted by the Arab League!

Livni was drawing on President Bush’s letter of guarantees to the comatose former Israeli Prime Minister, Ariel Sharon, on April 14, 2004, which was condemned by Arab Palestinians as a “second Balfour Declaration” because it pledged U.S. rejection of the Palestinian Right of Return and Israeli withdrawal to pre-1967 borders as “unrealistic.” Both strategic allies are now blackmailing Arabs to surrender further territorial and political “concessions” accordingly.

The simple interpretation of Livni’s objections: Israel is gearing up, backed by the U.S. , towards dividing the occupied Palestinian West Bank between the Jewish settlers whose colonies would be annexed to Israel and the Palestinians who will be left with 42 percent of the West Bank area to test-create a borderless transitional state as a long-term arrangement. Palestinian and Arab consensus condemn this arrangement as a non-starter, which will inevitably pre-empt any viable Palestinian state as envisioned by Bush’s two-state “vision.”

Obviously Israel is seeking an Israeli version of the API, but “unilaterally giving Israel what it wants is not a solution. It would be wrong for the Arab summit unilaterally to change the 2002 peace plan to meet the Israeli objections,” wrote Rami Khouri, the editor of Lebanon ’s The Daily Star, summing up a widely held official Arab rejection.

Even U.S.-allied Jordan and Egypt who signed peace treaties with Israel on a bilateral basis are urging a comprehensive approach now and recalling international legitimacy as the proper framework: During his meetings in the U.S. , King Abdullah II “underlined the need to solve the Palestinian issue in accordance with the Arab peace initiative and international legitimacy resolutions.” (4)

Changing the API would break up Arab consensus on it, which is its most effective asset that makes the collective peace offer credible and an historic turnabout opportunity.

Arab League Secretary-General, Amr Moussa, warned on record: “Arab peace initiative expressed an Arab consensus and will not be redrafted as demanded by some foreign powers. Watering down” the plan would be “a strategic mistake” that could lead to new bloodshed. “The Arab initiative is not open for review.” Similarly GCC secretary-general, Abd Al-Rahman Al-'Atiya, said the Gulf countries were opposed to changes to the API. Syria warned she “absolutely rejected for some hostile fingers to toy, directly or through brokers, with the agenda of the (upcoming) summit so that its decisions would come in harmony with the Israeli and American interests.”

The Arab diplomatic campaign however has had weight enough to corner Israel into defensive tactics. The Israeli maneuvering between the “original” and the “adopted” API is one tactic; another was Prime Minister Ehud Olmert’s statement on Sunday -- hours ahead of a meeting with Palestinian President Mahmoud Abbas in Jerusalem -- that Israel “was ready to take seriously” the Arab plan, hoping the upcoming Arab summit would bolster its “positive elements.” Abbas reportedly spent three quarters of their two-hour meeting trying to convince Olmert of the official API.

The wide political spectrum components of Israel’s incumbent cabinet of Olmert will go down into history as the government that has let its people down by manoeuvring to blackmail Arabs into an unattainable better deal than the best deal Israel has ever had and could ever have to realize its sixty-year old dream of being recognized and accepted as an integral part of the Arab and Muslim Middle East. Israeli peaceniks seem too marginal to have any say among the main stream decision-makers where the species of Avigdor Lieberman hold the upper hand on strategic issues.

Israeli leaders used to mock Arab leaders as the masters of missing opportunities. This time, Israel is the party who seems determined to miss a real historic opportunity.

Nicola Nasser is a veteran Arab journalist based in Ramallah, West Bank of the Israeli-occupied Palestinian territories.

Disgraced former NYPD Commissioner Bernard Kerik borrowed a line from a popular game show after federal prosecutors made him a plea offer that would have required him to do time:

No deal.

"He rejected the plea deal because he paid his taxes and did nothing wrong," his attorney Ken Breen said last night.

Breen declined to be more specific about the terms of the proposed deal, but a source familiar with the negotiations told the Daily News the terms called for Kerik to spend less than two years behind bars.

The potential deal was uncovered by NewsChannel 4, which reported prosecutors offered to end a federal investigation into alleged tax fraud, conspiracy to eavesdrop and mortgage fraud in connection with his Bronx apartment.

Prosecutors also say he should have declared the gift of the use of a midtown Manhattan apartment on his tax returns. Allegations about the midtown apartment surfaced after Kerik was criticized for using an apartment near Ground Zero for romantic trysts, the station said.

The eavesdropping charge stemmed from ex-Westchester County District Attorney Jeanine Pirro getting caught on tape asking Kerik, who now runs a security firm, to plant a listening device on the family boat to see if her husband, Albert, was having an affair.

Kerik faced a national scandal when he was nominated by President Bush in 2004 for homeland security chief. He bowed out when it was discovered that he had skirted taxes on his family's nanny-housekeeper, who may have been in the U.S. illegally.

Last year, Kerik pleaded guilty to accepting $165,000 in renovations to his Bronx apartment from a contractor with suspected mob ties. He was the city correction commissioner at the time. Kerik also owned up to a $28,000 loan he received from a real estate developer. He didn't have to go to jail.

Editor's note: I am moving to the other blog to post(also see new articles below).---14.03.2007

Prime Minister Nouri al-Maliki fears the Americans will torpedo his government if parliament does not pass a law to fairly divvy up the country's oil wealth among Iraqis by the end of June, close associates of the leader told The Associated Press on Tuesday.

The legislature has not even taken up the draft measure, which is only one of several U.S. benchmarks that are seen by al-Maliki as key to continued American support, a crucial need for the survival of his troubled administration.

U.S. State Department spokesman Tom Casey denied the administration would withdraw support. "The notion that we have in any way shape or form threatened to bring down his government over this law is simply untrue," he said in Washington.

Aside from the oil law, the associates said, American officials have told the hardline Shiite Muslim prime minister that they want an Iraqi government in place by year's end acceptable to the country's Sunni Arab neighbors, particularly Saudi Arabia, Jordan and Egypt.

"They have said it must be secular and inclusive," one al-Maliki associate said.

To that end, al-Maliki made an unannounced visit Tuesday to Ramadi, the Sunni Arab insurgent stronghold, to meet with tribal leaders, the provincial governor and security chiefs in a bid to signal his willingness for reconciliation to end the bitter sectarian war that has riven Iraq for more than a year.

Compounding al-Maliki's fears about a withdrawal of American support were visits to Saudi Arabia by two key political figures in an admitted bid to win support for a major Iraqi political realignment. Saudi Arabia is a major U.S. ally and oil supplier.

Former Prime Minister Ayad Allawi, a Shiite Muslim, flew to the Saudi capital Tuesday, a day after the arrival there of Masoud Barzani, leader of Iraq's largely autonomous Kurdish region. Most Kurds are Sunni Muslims.

"Allawi is there to enlist support for a new political front that rises above sectarian structures now in place," the former prime minister's spokesman, Izzat al-Shahbandar, told the AP.

Barzani spokesman Abdul-Khaleq Zanganah said the two Iraqis met in Kurdistan before the trip for talks on forming a "national front to take over for the political bloc now supporting al-Maliki."

It appears certain the United States was informed about the Allawi and Barzani opening to the Saudis, who are deeply concerned that al-Maliki could become a puppet of Iran, the Shiite theocracy on Iraq's eastern border they view as a threat to the region's stability.

Washington has been reported working more closely with Sunni Arab governments to encourage them to take a greater role in Iraq, particularly in reining in the Sunni insurgency that has killed thousands of U.S. soldiers and tens of thousands of Iraqi Shiites.

The Bush administration is believed to be trying to win support for its operations in Iraq among Arab neighbors by assuring a greater future role for the Sunni minority that ran the country until the U.S. invasion ousted Saddam Hussein four years ago.

One al-Maliki confidant said the Americans had voiced displeasure with the prime minister's government even though he has managed so far to blunt major resistance from the Mahdi Army militia to the joint U.S.-Iraqi security operation in Baghdad. The Shiite militia is loyal to anti-U.S. cleric Muqtada al-Sadr, whose political backing secured the premiership for al-Maliki.

"They have said they are frustrated that he has done nothing to oust the Sadrists, that the oil law has not moved forward, that there is no genuine effort on reconciliation and no movement on new regional elections," said the official, who like the other associates agreed to discuss the situation only if not quoted by name because of the political sensitivities.

Passage of the oil law, which seeks a fair distribution of revenues among all Iraq's sectarian and ethnic groups, has become a major issue for the United States, which had initially counted on financing Iraq's post-invasion reconstruction with oil revenues.

But the decrepit oil infrastructure and violence have left the country producing oil at about the same levels as before the war, at best, and those figures are well below production before the 1991 Gulf War that resulted in U.N. sanctions against the Iraqi oil industry.

The major Sunni bloc in parliament, along with Allawi loyalists in the Shiite bloc, openly oppose the draft measure. Al-Maliki also has lost the backing of the Shiite Fadila Party, and independent Shiite members are split on the bill. Those willing to speak about their opposition voice fears about what they see as too much possible foreign involvement and profit sharing.

The al-Maliki associates said U.S. officials, who they would not name, told the prime minister that U.S. President George W. Bush was committed to the current government but continued White House support depended on positive action on all the benchmarks especially the oil law and sectarian reconciliation by the close of this parliamentary session June 30.

"Al-Maliki is committed to meeting the deadline because he is convinced he would not survive in power without U.S. support," one of the associates said.

Casey, the U.S. spokesman, noted that the oil law is a goal laid out in the Iraqi constitution and repeatedly endorsed by al-Maliki. "However, the terms of that law, the specifics of that law are up to the Iraqis," he said, reports AP.

Standing in the way of forward movement is a recalcitrant Cabinet, which al-Maliki has promised to reshuffle by the end of this week. So far, however, he is at loggerheads with the political groupings in parliament that are threatening to withdraw support for the prime minister if he does not allow the blocs to name replacements for Cabinet positions.